Nifty, Sensex may rally higher – Wednesday closing report
We had mentioned in Tuesday’s closing report that Nifty, Sensex were trendless. The major indices of the Indian stock markets rallied on Wednesday and the gains were upto 1.25% over Tuesday’s close. The trends of the major indices in the course of Wednesday’s trading are given in the table below:
Value buying, key economic decisions and a strong rupee lifted the Indian equity markets on Wednesday as healthy buying was witnessed in capital goods, banking, and automobile stocks. In contrast, the BSE market breadth was skewed in favour of the bears -- with 1,546 declines and 952 advances. Value buying, after five consecutive days of falling share prices, triggered short covering which supported prices, point out market analysts.
Consumer electrical and electronics appliances maker V-Guard Industries Ltd is expanding its kitchen product range by launching gas stoves while its new voltage stabiliser factory at Sikkim will go on stream soon, said a senior company official. "We will soon launch gas stoves there by expanding our kitchen product range. Further, our new voltage stabiliser factory at Sikkim will go on stream soon. The expansion of our wire capacity at Coimbatore facility will also be completed soon," V Ramachandran, director and chief operating officer, told IANS on Wednesday. He was here to launch the Rs1,862-crore revenue company's new intelligent water heater branded Verano, that can be operated from anywhere in the world with a smart phone. Currently, the company sells kitchen items like induction cooktops and mixers. The company’s shares closed at Rs1,317.95, up 0.81% on the BSE.
The country has a lot of "unmet demand" for bank loans and a lot of gap is still to be filled in the banking space, Reserve Bank of India Deputy Governor Harun Rashid Khan has said. "We have a lot of unmet demands (for bank loans)...still a lot of gaps to be filled," Khan said in reply to a question on the central bank's plan to issue more licences for setting up new banks. Speaking to the media on the sidelines of a programme on Tuesday, Khan said the RBI would finalise draft guidelines for issuing on-tap universal bank licences. The RBI released in May the draft guidelines for 'on tap' licensing of universal banks in the private sector. According to Khan, with more and more people in the country getting involved in economic activities and demand for credit rising, there is a greater need for different types of banks. The Bank Nifty closed at 17,917.90, up 1.39% on the NSE.
India's cabinet on Wednesday cleared a new civil aviation policy with some changes in the rules that allow carriers to fly abroad, besides measures to promote regional connectivity and boost cargo operations, sources said. The policy seeks to create an eco-system to handle 300 million domestic passengers by 2022 and 500 million by 2027, and 200 million international travellers by 2027. India had seen 139.32 million domestic and over 50 million international air travellers in 2014-15. 
The top gainers and top losers of the major indices are given in the table below:
The closing values of the major Asian indices are given in the table below:


What is GST? A Primer

The proposed Goods and Services Tax (GST) will to be levied at the first point of transaction in sales of goods and services under the regime of uniform GST, most likely to be rolled out in April 2017.


The model GST law, circulated in the meeting of Empowered Committee of State Finance Ministers, says a threshold annual turnover for levy of the tax will be at Rs10 lakh. For North East and Sikkim, the limit will be at Rs5 lakh.


The model GST law has 162 clauses and four schedules. In case of tax evasion, maximum imprisonment of five years with a fine was suggested.


The published draft Bill of the destination-based, dual value added tax (VAT)-type GST has clarified that all e-commerce transactions will attract GST, which will be collected by the service operator as soon as the supplier receives payment. Bringing e-commerce under the purview of GST, which will unify the myriad indirect taxes, is likely to end the kind of recent arbitrary moves by state governments of Uttarakhand, Assam and Bihar that imposed a 10% entry tax on goods sold online.


The law also proposes for setting up of an Authority for Advance Ruling (AAR) and a 'Composition Levy' for entities with turnover of Rs50 lakh. GST would be payable on the "transaction value", being the price actually paid or payable, and said to include all expenses in relation to sale such as packing and commission.


With GST to be applicable according to whether a transaction is an "intra-state" or "inter-state", the draft law provides separate provisions which will help an assessee determine the place of supply for goods and services.


The states will draft their own State GST based on the draft model law with minor variations, incorporating state-specific exemptions.


The central government is hoping to get the Constitution Amendment Bill passed by Parliament in the upcoming Monsoon Session. It plans to roll out GST from 1 April 2017.


Virtually, all states have supported the idea of GST except Tamil Nadu which has "some reservations", Finance Minister Arun Jaitley had said after the meeting of Empowered Committee on the long awaited indirect tax reform. Here are salient features of draft GST Bill…


a. GST rate not specified in the Constitutional Amendment Bill, as desired by the Congress. Finance Minister Jaitley said there was complete consensus at the Empowered Committee Meeting that there should be no constitutional cap on the GST rate.


b. All forms of "supply" of goods and services such as sale, transfer, barter, exchange, license, rental, lease and import of services of goods and services made for a consideration will attract CGST (central levy) and SGST (state levy).


c. As GST will apply on "supply", the erstwhile taxable heads such as "manufacture", "sale" and "provision of services", among others, will lose relevance.


d. The liability to pay CGST or SGST will arise at the time of supply.


e. With GST to be applicable according to whether a transaction is "intra-state" or "inter-state", separate provisions are there to help an assessee determine the place of supply for goods and services.


f. States will draft their own State GST based on the draft model law with minor variations.


g. GST would be payable on "transaction value", being the price actually paid or payable, and said to include all expenses in relation to sale, such as packing and commission.


h. As the threshold limit, the draft GST Bill proposes Rs10 lakh, and for Northeast states and Sikkim, an amount of Rs5 lakh.



Kirit Baldev

4 months ago

Giving executive power has always breaded corruption as the onus always lies on assess and not assessor,who is not even accountable for his act. The same provision of the imprisonment should be applied to both the parties.
Equality before law.

Strong inflows into insurance and mutual funds in April-May, normally slack months

The first two months of FY2016-17 witnessed strong inflows in to insurance and mutual funds. Net inflows in equity MF remained positive at Rs4,400 crore, similar to April but compares well with net redemption in March 2016 says a research note. Kotak Securities in the report says, "Overall net equity inflows to mutual funds have been positive for about two years but moderated to Rs2,500 crore to Rs3500 crore per month post December 2015 from about Rs6,000 crore month earlier. This raised some concerns about the sustainability of the inflows. As such, positive inflows over the past two months are comforting." Similarly, in insurance sector, after a subdued April, the annual premium equivalent (APE) growth bounced back to 26% for private players, largely led by higher ticket size of the business. "Life Insurance Corp of India (LIC) reported 22% growth on the back of higher volumes. Equity market inflows to equity mutual funds continue to remain strong; this may be driving growth in unit linked insurance plans (ULIPs) as well. Interestingly, among large players, ICICI Prudential Life is slowing down due to reduction in ticket size (likely lower ULIPs); its individual policies were up by over 40% in the past two months," the report added.

Kotak says, during April-May, private insurers gained market share in stable group businesses, while single business remained strong for LIC. The state run insurer continues to have a high share of single premium with 68% share of total premium. Private players have generally been selective in this segment; the share of single premium was 50% as against 34% in FY2016 of premium of private players. Bajaj Life, HDFC Life and SBI Life have a higher share of single premium in their overall businesses. In the group business, the share of private players increased to 26% from 20% in April 2016. HDFC Life and SBI Life gained market share.




4 months ago

Lower returns in other asset classes is causing money to move into equities.

Fresh inflows into equities shall lead to higher valuations.. And better stock market performance shall attract even more inflows. . . . It will be difficult now to stop domestic savings from flowing into equities as the tide keeps rising.

Ramesh Poapt

4 months ago

brexit ,fed hike,gst,monsoon -adverse....mkt crash then see good outflow....

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